Local Indian hot rolled coil (HRC) prices have edged lower reacting to mills dropping base prices for June, combined with sluggish movement of stocks in trade channels.
Sources said that HRC trade prices have lost INR 500/mt ($6/mt) to INR 55,300/mt ($670/mt) ex-Mumbai and are down INR 300/mt ($4/mt) to INR 54,000/mt ($656/mt) ex-Chennai in the south.
Despite mills reducing base prices, this failed to revive fresh bookings by trade channels, which are reported to be already carrying large stocks, while demand from end-users has remained tepid largely attributed to the usual lean season ahead for most industrials.
“The cut in base prices did not have the desired impact and bookings continued to remain very low during the past week, indicating a fundamental demand weakness across industries. We hear that there has been some slowdown in import bookings, which prevented a sharper fall in local trade prices. But this is likely a lull because cheap imports are here to stay,” a Mumbai-based distributor said.
According to a steel sector analyst with a Mumbai-based financial advisory firm, despite the forecast earlier this year of a 1-2 percent increase in HRC prices in 2023, this has been reversed and prices are now expected to soften further by 4-5 percent year on year due to higher import competition.
“A lot of ex-China HRC has come in and more bookings are expected as the projected demand growth in China has not materialized and sellers are aggressive in pushing sales overseas, including to India. Also, a lot of duty-free tonnages are scheduled to arrive from Japan at discounts ranging at $30-50/mt to domestic trade prices on landed price basis. Our assessment is that imported HRC can surge by 40-50 percent in the current year and this will continue to keep the local market under pressure,” he said.
$1 = INR 82.50
